IPO Stock Of The Week and artificial intelligence leader Samsara (IOT) is trading near a buy point despite the week’s stock market losses. The AI stock is on Investor’s Business Daily’s IPO Leaders screen.
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Investment in enterprise data systems to leverage generative-AI capabilities is right up Samsara’s alley, though the company approaches the challenge from the cloud. Samsara provides sensors and cloud-based software to manage vehicle fleets and other physical operations through its Internet of Things platform.
Samsara reported fiscal Q1 adjusted earnings of 3 cents per share, swinging from a loss of 2 cents in the year-ago period. Revenue jumped 37% to $280.7 million. Quarterly sales growth slowed from the 40%-52% range over the prior seven quarters. Estimates call for 30%-32% sales growth over the next three quarters, according to IBD MarketSurge.
For fiscal year 2025 ending in January, Samsara earnings are expected to surge 91% to 13 cents per share, with an expected rise of 72% in fiscal 2026, per FactSet.
Samsara stock offers a less-than-ideal 85 IBD Composite Rating. But its recent strength during the stock market volatility makes it a top AI stock to watch.
AI Stock Hits Buy Trigger
After regaining its 50-day moving average this month, the AI stock has built a cup with handle that has a 38.47 buy point, according to IBD MarketSurge analysis. Samsara shares made a brief move above it on July 23 but went back below the entry. Wait for a decisive move above that buy trigger before considering a purchase of shares.
A bullish signal is that the current base formation undercut the lows of the previous base. That resets the base count and makes the current base a first-stage pattern. First-stage bases are more likely to net bigger gains than later-stage formations.
On the downside, the relative strength line isn’t near its old highs, which is a negative factor. Look for that technical indicator to continue its recent rebound if a new breakout emerges.
Follow Scott Lehtonen on Twitter at @IBD_SLehtonen for more on top AI stocks and the stock market.
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